The GUST Restatement is named from an acronym created by combination of the General Agreement on Tariffs and Trade, the Uniformed Services Employment and Reemployment Rights Act, the Small Business Job Protection Act and the Taxpayer Relief Act. This piece of legislation was passed in reaction to the changes made to laws which affect qualified retirement plans.
The term describes these legal adjustments that annuities and retirement plans were forced to make as a result of changes designed to benefit employees. Employers and sponsors of retirement plans had to complete new Adoption Agreements and restate their prototype qualified plans so as to maintain qualified status under the new regulations.
The GUST restatement process may require several revisions to the original documents of an annuity or retirement plan. One example of such changes is in the definition of compensation. The new definition allows some transportation benefits which were previously denied. Additionally, because these benefits now fall under the title of compensation they can affect the maximum allowable contribution.
While plans were obligated to make the changes necessary to stay in compliance with the new regulations, the managers of said plans had to inform participants of the changes so they could react appropriately. Plans affected by the changes included profit sharing, money purchase, 401(k)s, defined benefit plans, stock bonuses and more.
The goal behind the required restatement was ease of comprehension. The IRS determined that so many changes had occurred with regards to retirement accounts that completely restating plans would be simpler than taking a piece meal approach.